300 Executive Park
Asheville, NC 28801

Archive for the 'Mortgage Reviews' Category

Mortgage Week in Review

While the headlines were focused on the poor performance of the stock market, mortgage rates improved moderately during a volatile week.  Mortgages rates were helped by a couple of factors.  Seeking to reduce risk, investors sold stocks and moved the funds into relatively safer Treasury bonds and government guaranteed mortgage backed securities.  In addition, slower economic growth and lower energy prices reduced expectations for future inflation.  More good news for the housing market came from the September Existing Homes Sales report, which rose 5.5% from August to the highest rate since August 2007.

Another important development was a decline in Libor rates during the week.  Libor rates are viewed as a primary indicator of credit market conditions.  They are also an important benchmark for setting the rates on many consumer loans, including adjustable-rate mortgages.  Libor rates shot higher during the credit crisis when financial institutions became reluctant to lend money to each other.  The broad series of recent government actions brought Libor rates down closer to more normal levels.

The biggest event this week will be Wednesday’s Fed meeting.  Investors have priced in a half-point rate cut, and they are waiting to see if the Fed will take any other actions to boost the economy.  The most important economic data will be Thursday’s Gross Domestic Product (GDP) report.  GDP is the broadest measure of economic activity.  In addition, New Home Sales will come out today. 

Brought to you by:  Cameron Lewis, Beverly-Hanks Mortgage, Xinnix 2008 & MBSQuoteline

Spoken by Sandy Sibley | Discussion: 1 Comment »

Mortgage Week in Review

 

 This week the stock market fell to the lowest level since 2003. Normally mortgage markets improve during a stock market decline, since Fannie Mae, Freddie Mac, and Ginnie Mae mortgage backed securities (the vehicles through which most mortgages made today are sold) are considered a relatively safe haven. This week, however, the prices paid for these securities moved lower as well. One reason is that some investment funds have been forced to reduce their leverage and sell nearly every asset class in their portfolios. Another factor is investor concern that the supply of debt will increase significantly as the government funds its rescue actions. Mortgage rates ended the week moderately higher. Investors viewed the $700 billion rescue plan passed last week as a necessary first step, but not an immediate solution to the credit crisis. Governments around the world took a variety of additional steps during the week to support the banking system. A historic coordinated interest rate cut from many central banks took place on Wednesday. The Federal Reserve lowered the Fed Funds rate by one half point to 1.50%, citing reduced inflationary pressures due to an economic slowdown and falling energy prices. The Fed Funds rate heavily influences short-term interest rates, but its impact on long-term mortgage rates varies based on inflation expectations. In this case, the Fed rate cut most likely helped move mortgage rates a little lower, but the factors described above had more influence.The decline in home prices was a major cause of the credit crisis, and stabilization in the housing market will be important to resolve the problems. Little noticed this week, August Pending Home Sales jumped 7% from July, far above the consensus for a small decline. They were 9% higher than one year ago and were at the highest level since June 2007. Pending Home Sales are a leading indicator for the housing market, meaning that the next Existing and New Home Sales reports may show increases. Investors will be closely watching future housing market data to see if the trend continues.

The Economic Calendar will be full next week. The Consumer Price Index (CPI) inflation report will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. The Producer Price Index (PPI) will be released on Wednesday. PPI focuses on the increase in prices of “intermediate” goods used by companies to produce finished products. Retail Sales is also scheduled for Wednesday. Industrial Production, an important indicator of economic activity, will be released on Thursday. Housing Starts will come out on Friday. Consumer Sentiment, the Philadelphia Fed index, and the Fed’s Beige Book will round out a busy week. Investors will also be watching for additional government actions to ease credit markets. Mortgage markets will be closed on Monday in observance of Columbus Day.

Brought to you by:  Cameron Lewis, Beverly-Hanks Mortgage, Asheville, N.C. 828-258-1945 Office, 877-293-5946 Toll Free, clewis@beverly-hanks.com

Courtesy: MBS Quoteline & Xinnix

Spoken by Sandy Sibley | Discussion: No Comments »

Mortgage Week In Review

Mortgage Week In Review

 The big news this week was Tuesday’s Fed meeting. As expected, the Fed held the Fed Funds rate at 2.0%, but investors were concerned with the tone of the accompanying statement. The Fed’s challenge is to balance the risk of slower economic growth with the threat of higher inflation. Overall, the statement indicated that the Fed is more concerned with stabilizing the financial system than with fighting inflation. This, combined with Monday’s higher than expected reading on core PCE inflation, led to a small increase in mortgage rates during the week.The European Central Bank (ECB) also held a policy meeting this week, and they, too, made no change in interest rates. ECB President Trichet’s comments were similar to Bernanke’s, with warnings about the risks of both slower economic growth and higher inflation in Europe. The economic performance of other countries is important for US mortgage markets, since foreign investors purchase a large quantity of US bonds. For example, foreign investors accounted for 43% of the 30-yr issue and 34% of the 10-yr issue in this week’s Treasury auctions.

In the housing sector, the June Pending Home Sales index rose 5% from May. Pending Home Sales are a leading indicator of future housing market activity, so the next Existing and New Home Sales reports may show increases. In addition, the chief economist of the National Association of Realtors (NAR) expects the recently passed Housing Bill to stimulate the housing market later in the year.

Next week, the Trade Balance will come out on Tuesday. Retail Sales is scheduled for Wednesday. Consumers account for about 70% of economic activity, and this report is a major indicator of spending levels by consumers. The Consumer Price Index (CPI) inflation data will be released on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. Industrial Production, an important indicator of economic activity will come out on Friday. Consumer Sentiment and the Empire State index will round out the schedule.

  Have a great week!

Courtesy of Xinnix and MBS Quoteline

Copyright @ 2008 MBSQuoteline

Cameron M Lewis

Beverly-Hanks Mortgage Services

Residential & Commercial Financing

828-258-1945 Office

877-293-5946 Toll Free

clewis@beverly-hanks.com

Spoken by Sandy Sibley | Discussion: No Comments »

Mortgage Week In Review

 

 Happy Monday to everyone!  Once a week my favorite mortgage man here at Beverly-Hanks, Cameron Lewis, puts out an excellent, to-the-point review of where the mortgage markets are going, or what’s happening in the financial markets that affects mortgages.  I’m happy to share these with you on a weekly basis and you will find them most likely on Mondays or Wednesdays.  If you have specific questions for Cameron, I will be including all of his contact information at the end of this article.

 Mortgage Week In Review  A comprehensive Housing Bill was agreed upon by the House, the Senate, and the President this week, and it was successful in increasing confidence in the guarantees provided by Fannie Mae and Freddie Mac. As a result, mortgage rates ended the week modestly lower. Formal passage of the Housing Bill is considered a sure thing. One primary feature is that it authorizes the Treasury to provide credit to and buy shares in Fannie and Freddie, if needed. According to industry trade publications, Fannie and Freddie, along with the FHA, accounted for 90% of US home mortgages originated in the second quarter of 2008, up from just 49% one year earlier. Keeping the two firms healthy is vital for the US housing market.

Besides providing support for Fannie and Freddie, the Housing Bill will also help the housing market in other ways. One program will allow the FHA to insure up to $300 billion in new loans targeted at troubled homeowners. Another program adds tax credits for first-time homebuyers, which in essence will be a 15-year interest free loan for up to $7,500. In addition, the bill provides funds for more low income housing and grants to be made for local community redevelopment. A wide range of smaller programs are included as well.

The economic news in the housing sector was mixed. June Existing Home Sales fell slightly, and inventory levels of unsold homes increased. In contrast, New Home Sales were significantly higher than expected in June, and the May figures were revised higher as well. High inventory levels will probably need to come down to achieve a meaningful recovery in the housing market, but the chief economist of the National Association of Realtors (NAR) believes that the Housing Bill will play a major role in helping the housing market to rebound. In particular, he expects the first-time homebuyer tax credit to boost future home sales.

Friday will be the big day next week. The important Employment report will come out that day. As usual, this data on the number of new jobs created, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month, since the health of the labor market is perhaps the single biggest factor in the performance of the economy. Early estimates are for a loss of 70K jobs in July.

The first reading of second quarter 2008 Gross Domestic Product (GDP) will be released on Thursday. GDP is the broadest measure of economic activity. The two national manufacturing indexes, the ISM and the Chicago PMI, will come out on Thursday and Friday. Consumer Confidence and Construction Spending will round out the schedule.

Cameron M Lewis

Beverly-Hanks Mortgage Services

Residential & Commercial Financing

828-258-1945 Office

828-231-4909 Mobile

828-254-7202 Fax

877-293-5946 Toll Free

clewis@beverly-hanks.com

Spoken by Sandy Sibley | Discussion: 1 Comment »

Directory of Real Estate Blogs Add to Technorati Favorites

Copyright © 2007 Asheville Real Estate Voice by Sandy Sibley     Agent Login     Design by Real Estate Tomato     Powered by Tomato Blogs